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Morning Briefing for pub, restaurant and food wervice operators

Fri 1st Nov 2019 - Friday Opinion
Subjects: Noise and neighbours, an open letter to David Aaronovitch, the future is mobile, and personalise or perish
Authors: Glynn Davis, Paul Chase, Katy Ryder and David Bird

Noise and neighbours by Glynn Davis

When an American tourist was asked whether they enjoyed their visit to Windsor Castle, so the joke goes, they replied: “Yes, but why have they built such a lovely place so close to a noisy airport?”

I haven’t dug up this humorous tale in a desire to question the intellect of US citizens but because it reminds me of the situation many pubs find themselves in when they are threatened with noise abatement notices by neighbours.

If you’re sensitive to noise, surely the best thing is to avoid renting or buying a home anywhere near a pub. I love pubs significantly more than the vast majority of the population but would I choose to live close to one? No chance, because I also love a good night’s sleep (especially after I’ve visited the pub).

However, it appears not everyone follows such a rule and some rather blindly, or drunkenly perhaps, find themselves living near a pub and, upset by noise, threaten the landlord with licence restrictions. Such complaints are on the rise – no doubt helped by the Licensing Act of 2003 that brought in regulations in 2007 that gave residents much more power to object to a pub’s licence.  

I first became aware of how much of an issue this can be when talking to the worried owners of The Rake bar in Borough Market some years ago. They had been trading for years with no problems until someone moved into the flats opposite and started complaining about the noise. The pub was threatened with a ban on all drinking outside the pub, which would have been the death knell for the business such is its tiny interior. The vast bulk of the pub’s revenues derive from outdoor drinkers and the resident clearly should have carried out more reconnaissance before moving into the flat.

Pubs specialising in live music have also had a tough time with many facing a ban on gigs, which would remove their USP in a single stroke and put their businesses under severe pressure. The King’s Head in Llandudno is in the midst of fighting its case to continue with long-standing live music events.

Dan Fox, who operates three London pubs, makes great efforts to manage his venues with the neighbours in mind. He has meetings with them ahead of any live music event, occasionally invites them into the pub for drinks and ensures they all have his mobile number if any concerns need addressing.

Although two of Fox’s pubs have residential properties above, the fact they are owned by the same landlord as the boozer removes certain problems. They are only let on six-month contracts so people aren’t locked in indefinitely if they are unhappy, while high-quality soundproofing has been installed. The landlord wants all his pub and residential tenants to be happy.

Problems occur, however, when property developers sell the flats and, having little interest in running the pub below, fail to get planning permission to convert it to residential. Fox suggests they will have invariably cut corners on soundproofing and be indifferent to creating harmony between pub management and disgruntled homeowners above.

If you think the most sensible thing is to forget all about engaging in noisy activities such as live music and focus on the quieter things in life, such as food, think again. A landlord I know has a pub on the outskirts of London with a neighbour on one side who complains the extractor fan needs cranking up to more effectively remove smells, while the neighbour on the other side complains the fan is far too noisy and should be used only sparingly. In the current circumstances, perhaps throttle isn’t the best word to use. Then again, he could always opt for the quiet life and move to Windsor?
Glynn Davis is a leading commentator on retail trends

An open letter to David Aaronovitch by Paul Chase

Dear David,

I read with interest your article in The Times headlined “Prohibition showed bans can be good for us” (published 30 October). As with many attempts at historical revisionism it relies on cherry picking what are, in any event, contested claims about the public health benefits of America’s decade-long experiment with prohibition while playing down its impacts on crime and corruption.

In relation to the public health benefits of prohibition, you wrote: “In 1911 the death rate for cirrhosis among American men was nearly 30 per 100,000. By 1929 that had been reduced by more than 30%. Registered admissions to mental hospitals for psychosis linked to alcohol more than halved. Even by 1933, when Volstead was revoked, alcohol consumption had gone down by a third since pre-prohibition. Whatever Mark Twain may have written, prohibition saved many, many lives.”

An examination of death rates does reveal a dramatic drop in deaths due to alcoholism and cirrhosis but the drop occurred during the First World War, before the enforcement of prohibition. The death rate from alcoholism also flattened out just before the enforcement of prohibition and then returned to pre-First World War levels (Warburton p.90). That was probably the result of increased consumption (not decreased consumption as you claim) during prohibition and the consumption of higher strength moonshine liquor. The death rate from alcoholism and cirrhosis also declined dramatically in Denmark, Ireland and Great Britain during the First World War but rates in those countries continued to fall during the 1920s – in the absence of prohibition – when rates in the US were either rising or stable.

The death rate due to alcoholism and cirrhosis began to decrease after 1916, almost five years before prohibition began, largely due to increased taxation. The tax rate on a gallon of distilled spirits increased from $1.10 to $3.20 in October 1917 and to $6.40 in February 1919. Prohibition only came into effect in January 1920. Relying on a decline in deaths per hundred thousand ignores the facts of massive immigration that inflated the population as well as the impact of the First World War. According to Thomas Coffey: “The death rate from poisoned liquor was appallingly high throughout the country. In 1925 the national toll was 4,154 compared with 1,064 in 1920.”

You go on to make several selective claims about the impact of prohibition on crime: “But what about the extra crime and the corruption it caused? In fact there was no big increase in homicide or violent crime in the era of prohibition. True, mobsters – who existed long before the ban – pitched into liquor smuggling but when prohibition was over they just moved on to other things. In the meantime arrests for public disorderliness due to drink fell by half, as did recorded complaints of domestic abuse (almost invariably violence by a drunken man against his partner or family). Capone and the mob may have got the headlines and the movies but the quieter story was the unbeaten wife.”

Sorry, but that’s wrong! There was a big increase in homicide and violent crime that began before prohibition and continued during it. Theft of property increased 13.2%, homicide increased 16.1%, and robbery rose 83.3% between 1910 and 1923, while minor crimes (which were large in number) such as vagrancy and public swearing decreased more than 50%. Homicide increased from six per hundred thousand of the population before prohibition to ten per hundred thousand by 1933. And you airily dismiss the impact of organised crime – “when prohibition was over they just moved on to other things”. You bet they did! The vast fortunes made from bootlegging by organised crime financed their move into the illegal drugs trade, expanded their operations in gambling and prostitution, and vastly accelerated the rise of the American Mafia.

In the three months before prohibition took effect, liquor worth half a million dollars (at 1920 prices) was stolen from government warehouses. By midsummer 1920, federal courts in Chicago were overwhelmed with 600 pending liquor violation trials (Sinclair, 1962: 176-177). Within three years, 30 prohibition agents were killed while on active service.

Other statistics demonstrate the increasing volume of the bootleg trade. In 1921, 95,933 illicit distilleries, stills, still works and fermenters were seized. In 1925, the total jumped to 172,537 and up to 282,122 in 1930. In connection with these seizures, 34,175 persons were arrested in 1921; by 1925 the number had risen to 62,747 and to a high in 1928 of 75,307 (Internal Revenue Service, 1921, 1966, 1970: 95, 6, 73). Concurrently, convictions for liquor offences in federal courts rose from 35,000 in 1923 to 61,383 in 1932. The institution of the speakeasy replaced the institution of the saloon. Estimates of the number of speakeasies throughout the US ranged from 200,000 to 500,000 (Lee, 1963: 68).

Did prohibition succeed? If the point of banning something is to stop it happening, it didn’t. Millions of Americans continued to buy and drink alcohol. The attempt to legally suppress the mass market failed completely. However, for such large-scale flouting of the law to happen required the corruption of public officials on a massive scale. Police officers, court officials, judges and congressmen all had to be bribed to turn a “blind eye”. Organised crime and the rise of mafia and “Murder Incorporated” in the US was therefore a product of National Prohibition.

Less well known is the fact prohibition led to a huge increase in the trafficking of women for prostitution. Prohibition separated men from women. Women drinkers preferred to get together in one another’s homes. Men preferred to visit speakeasies, where they met women trafficked for prostitution by organised crime. This, in turn, led to an increased incidence of sexually transmitted diseases – a serious matter in a society that had yet to discover penicillin.

In your rush to wrap a disastrous, failed social experiment in misty-eyed nostalgia, all this seems to have passed you by David.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

The future is mobile by Katy Ryder

Starbucks has broken ground on a new site in New York City that might lead to a change in your Frappuccino orders. The site will offer Starbucks Pickup mobile ordering only so if you want to grab your morning coffee in the city that never sleeps, you’ll have to have the app.

The idea is simple – browse the menu, order and pay from your smartphone, then swing by to collect. Order ahead isn’t new but removing the option to order from a human is.

It’s a radical move given we know customers appreciate being offered various ways to pay but Starbucks has the financial muscle to test unchartered models in different locations. Starbucks chief executive Kevin Johnson told CNN business: “Every store, every community has its own personality. The idea is to serve the multiple needs of that community.” It’s safe to assume those in the hustle and bustle around Penn Station, where the concept is set to launch, will appreciate the ease. More than one billion people worldwide will make an in-store mobile payment in 2020 so catering to the needs of the digital generation is paramount. 

Impatient commuters and Starbucks super fans are going to be happy and it seems this model will keep overhead costs low but it will come at the likely expense of a cut in staff. If this concept proves successful does it signal a move towards a dystopian future full of robots, with human interaction going down the drain? In Starbucks’ case, and any coffee shops that might follow, there’s a clear requirement to keep staff engaged and on board – one that has an overall benefit for the business as well as baristas.

Starbucks’ mobile app got off to a bumpy start, originally leading to longer wait times and frustration on both sides of the counter – not to mention a 2% fall in transactions during the quarter. Now, with a wider digital reach and personalisation improvements to the app and in-store processes, things are heating up for mobile and in a way that still requires humans as a valid part of the equation.

As coffee shops fight to differentiate themselves and consumers grow increasingly demanding of their experiences, all brands will have to strive to provide better service while looking at ways to keep costs under control – Starbucks included.

If Starbucks presses ahead with this mobile-only model it will need to place employees in targeted areas such as delivering more orders (now with the added perk of not splitting focus between the till and beverage-making), helping customers with queries and issues, and maintaining a spotless shop floor. Plus, let’s not forget employees are still the ones making the coffee. 

Experiences are evaluated on the whole and, if Starbucks doesn’t continuously deliver on these elements, customers will turn to others that are clean and tidy and where they feel looked after. According to a 2018 research report from Temkin Group, more than four-fifths (86%) of buyers are willing to pay more for a great customer experience. Customer experience is customers’ perception of how a company treats them and is what ultimately drives loyalty for a business. Starbucks’ brand-boosting can be attributed to a whole host of factors, one being a welcoming space full of friendly baristas.

Starbucks can afford a lot of things but not a future business model that fails to continually cater to the experiential demands of its customers. The overall experience is more valuable than simply the ease of paying on mobile, and this points to mobilising staff in the most effective way while delivering on demand for mobile.

Mobile ordering is a differentiator and, more than that, makes a difference. According to research conducted by Wi5 and Kantar, more than two-thirds (69%) of those aged 18 to 34 expect restaurants to offer a mobile ordering solution. This isn’t a preference or “nice to have”, it’s an expectation. By 2020, the number of smartphone users is projected to reach 2.87 billion.

Moreover, this demographic checks their phones on average every 8.6 minutes so a mobile-centric strategy is simply meeting customers where they already are. With a phone in billions of peoples’ hands, the ability to make purchases online is driving their purchasing power. The future is mobile-driven experience backed by staff-supported excellence.
Katy Ryder is content and communications manager at mobile order and pay solution Wi5

Personalise or perish by David Bird

In more than a decade of developing database marketing software I’ve never been so excited. Gone are the days of pubs capturing customer data via the fishbowl at the end of the bar or guests signing up to membership programmes with pen and paper – a slow and steady approach that would often generate an illegible list of email addresses and little else.

Technology has become more agile and responsive in recent years. It has become far easier for hospitality businesses to capture more data – not only in vast volumes but also rich, actionable insights.

Visit frequencies, transactional data, products purchased and much more now sit behind a customer’s email address but this increase in available data is accompanied by stronger legislative measures designed to protect consumers.

In a post-GDPR world it’s no longer a valid (or sensible) strategy to send an email campaign to your list and expect results. There are increasing numbers of businesses vying for your customers’ attention in their inbox and the amount of company lists they subscribe to has diminished. On top of that global email opening rates are falling, with the foodservice sector seeing average open rates of only 15.48%. The problem has become one of more data, less engagement.

So do you throw the baby out with the bathwater and focus your marketing efforts elsewhere? No. The simple answer – and the reason I’m so excited – is to do email marketing better. More customer data and stricter measures on what you can do with it should be seen as an opportunity to take the next step. Put simply, you must personalise or perish. This is the challenge and slick operators are starting to think more seriously about their database marketing and what’s possible in terms of driving customer loyalty.

It all starts with collaboration. For years operators have had systems such as guest Wi-Fi, booking platforms and loyalty programmes in their business that capture customer data in isolation. The challenge has been to bring it all together to make sense of it and use it to ultimately grow the business, something that’s difficult and expensive. However, it doesn’t need to be and neither should it. I always say to customers it’s not the task of operators to design data flows and integrations – that job is down to suppliers.

Luckily there are many software providers in the hospitality sector who are only too keen to work collaboratively. It makes sense for all involved, especially when a partnership creates a system where the whole is greater than the sum of its parts.

Once you’ve got your systems playing nicely and all your data is being piped through to your CRM, it’s time to start personalising your campaigns and here’s why it’s so important – it’s more economical to send a one-to-one message than one to all.

Surely it’s more expensive and time-consuming to set up hyper-personalised, one-to-one messages rather than sending a campaign to 5,000 contacts in one go? Yes, you need systems to manage these campaigns with the required integrations and they have a cost, but what we should be focusing on is the end goal, which is to generate another visit or stretch the customer’s spend during their visit.

These are the goalposts so which campaign is going to score more easily – a one-to-one message that resonates with the customer and puts them at the centre of your business or a one-to-all message with the same generic content as the other ten emails they might receive from your competitors?

When working back from the results, personalisation is actually far more cost-effective. For one multi-site pub group we work with these campaigns have driven impressive rates of return footfall and resulted in tens of thousands of pounds of additional spend while more than doubling the number of downloads of its branded app, which allows the business to capture even more data.

Personalisation is about creating a one-to-one experience. There’s nothing greater than that warm feeling of being recognised as a loyal customer. Amazon, along with Netflix and Spotify, is a brilliant example of how to do it right on a huge corporate scale – recommendations rain down depending on your on-site activities. This can offer you a huge competitive advantage in an increasingly challenging market place – so what are you waiting for?
David Bird is UK sales director at Impact Data, the automated and integrated digital marketing platform

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